ESG

Environmental, Social, and Corporate Governance (ESG) refers to metrics that are related to the intangible assets within an enterprise, a form of corporate social credit score.

Research shows that intangible assets comprise an increasing percentage of an enterprise's future value.

While there are many ways to measure intangible assets, these three central factors together, ESG, comprise a label that is fast gaining traction across all industries. (It was initially adopted by the United States financial industry.)

The labels are used as placeholders for numerous ideas, with the ultimate objective of quantifying elements related to sustainability and societal impact of a company or business.

Environmental

Environmental criteria may include a company’s energy use, waste, pollution, natural resource conservation, and treatment of animals.

The criteria can also be used in evaluating any environmental risks a company might face and how the company is managing those risks.

Other key areas which demonstrate a companies environmental credentials include: - Climate Crisis / Sustainability.

Environment and PIM's Net Zero Policy

PIM have taken a deep dive to consider their impact on the environment. As a primarily office based consultancy, it is at first difficult to see what meaningful measures can be put in place.

But further introspection, taking on board the theory of marginal gains has lead to a realisation that there are lots of things that can be done that will ultimately make a difference.

These include but are by no means limited to: -

1. Electricity - Use of energy saving bulbs, automatic lighting sensors, thermostat optimisation.
2. Transport - Encouragement to use public transport or car sharing, cycle to work scheme, bike racking facilities, greater use of tele-working facilities such as teams and zoom, enhanced VC facilities.
3. Carbon Offset - PIM is actively looking into ways of combining the principles of carbon offsetting with tree planting schemes. It is hoped that this might be linked to our Social criteria also to leverage any effects.

Social

Social criteria look at a company’s business relationships.

Does it work with suppliers that hold the same values as it does?

Does the company support the local community or encourage and help employees to perform volunteer work?

Do the company’s working conditions show high regard for its employees’ health and safety? Are other stakeholders’ interests taken into account?

Other key areas which demonstrate a companies social credentials include: - Diversity / Human Rights / Consumer Protection / Animal Welfare

Generosity, Gratitude, Trust, Respect, Honesty, Appreciation.

All of the above are words that will engender a positive feeling or attitude within an organisation or group. Indeed the benefits of having these attributes manifest within a company are obvious and the dividends are self evident.

What is not always recognised is how directing these same attributes away from a company into the wider community can also create benefits for all stakeholders.

Sharing positivity with the wider community, while not at first visibly bringing benefit to the company will on greater scrutiny often have a larger effect than at first anticipated.

Return on investment doesn't have to be measured directly in cash terms.

Governance

With regard to governance, investors may want to know that a company uses accurate and transparent accounting methods and that stockholders are given an opportunity to vote on important issues.

They may also want assurances that companies avoid conflicts of interest in their choice of board members, don't use political contributions to obtain unduly favorable treatment and, of course, don't engage in illegal practices.

Other key areas which demonstrate a companies governance credentials include: - Management Structure / Employee Relations / Executive Compensation / Employee Compensation